Adults hunger for health and convenience of meal kits

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Dive Brief:

One in four U.S. adults has purchased a meal kit either in the store or for delivery during the last year, with 70% going back after making their first purchase, according to Nielsen.

Nielsen found 60% of Americans use diet to help prevent ailments, so including fresh foods and easy-to-follow recipes make meal kits an appealing choice for those looking to manage their health and diets.

Millennials and Gen X consumers are 321% more likely to purchase meal kits than those in older generations.

Dive Insight:

Marketing studies estimate U.S. meal kit delivery services will generate upward of $1.5 billion in sales this year behind leaders including HelloFresh and Blue Apron.

People want convenience in their lives and buying prepared food in meal kits is one way to get it. They are often healthier than take-out options and there are more choices in the normal grocery store or delivery service options. The nascent industry has shown signs of struggling recently, with at least half a dozen meal kit startups closing or reorganizing to cover costs. Cash-rich food companies like Tyson Foods,Campbell Soupand Hershey also are entering the industry as they hunt for new ways to generate revenue.

Like many new hot industries with low costs to entry, the meal kit industry will ultimately be left with a few players — with their financial strength, customer experience and most importantly the quality of their food among the key factors in determining who emerges on top.

Still, there are some concerns that the meal kit industry isn't as popular as once thought.A study released in 2016 by NPD Group found fewer people are using meal kit services. Even though people are looking to eat healthier and in a way that is more convenient, its uncertain whether enough consumers will be willing to pay for meal kits — which typically cost $10 per person compared to the average home-cooked meal at about $4, and both take time to prepare — to sustain the industry for the long term.